BY: MOHAMMAD WAHID ABDULLAH KHAN
Summary: assigning time budgets is the important for each of every auditor, they will be complete the project as time as budgets base, the audit manager should provide all guidance in the assignment plan before the full audit commences. Objectives in the assignment plan should be achieved and the audit manager review should ensure this. Performance - time - budgets makes clear that the internal audit activity should evaluate and contribute to the improvement of risk management, using a systematic and disciplined by the terms of act – for assigning time and budget
Time is the key factor on any audit. Setting a time budget acts as a principal control over the assignment and is the single most important concern of audit management. A viable audit is achieved within budget to professional audit standards and as a full discharge of its objectives. Objectives in the assignment plan should be achieved and the audit manager review should ensure this. Performance - time - budgets makes clear that the internal audit activity should evaluate and contribute to the improvement of risk management
Target dates for start and completion and key stages. For larger audits, break the task
Down into defined stages and manageable parts that may be reported on separately. This enables the auditor to maintain a focus on the objective at hand, and report before going on to deal with the next part.
For example, a corporate system, which has been devolved? Down to departments like personnel, time- budgeting, or expenditure processing, may be broken down into sections relating to each department.
Budgeted hours must be realistic and achievable. An alternative approach is more basic and simply states (for example):
LARGE AUDIT > 4 WEEKS (Approx 28 Days)
MEDIUM-SIZED AUDIT > 2 WEEKS (Approx 14 Days)
SMALL AUDIT > 1 WEEK (Approx 07 Days)
Extensions are not encouraged as the auditor has to perform as much work as possible during the budget hours and then move on to the next job. The adopted policy must be explained and detailed in the audit manual since work done on one audit detracts from work that might be done elsewhere. The extent of work done in such time frames depends on the skill and expertise of the Individual auditor. A performance appraisal scheme rewards those who deliver quality reports within the time constraints. There are two different views.
One seeks to perform the audit terms of reference to the full no matter how long this takes, even if budgeted hours are extended. This normally involves extensive testing and an inability to defer parts of the audit to a later stage.
The other view is that audit management sets a defined number of hours according to the level of risk attached. When this budget expires the auditor must transfer to another work area, so recognizing the risks of not dealing with the next planned audit.
The auditor becomes too closely associated with the operation, asking for more and more time to spend on the audit. The correct position is to provide budgeted hours for the audit and then remove the auditor from the work once this has expired unless there are exceptional circumstances. The working file will show what work is outstanding that may be deferred to the next audit. Auditor attachment can lead to audit saturation where there has been too much time spent by the audit team on only one area of risk.
Auditors can be drafted in to deal with each department if a suitable programmed of work has been prepared and explained and the work programmed requires extensive testing and interrogation of the corporate database. Once compiled, it can be completed by a variety of resources as time –budget on the starting point project volume
Conclusion: A practical audit is achieved within time - budget to professional audit standards and as a full release of its objectives. The auditor will also be concerned that compliance issues have been addressed by management and Implementation Standard The internal auditor should consider the probability of significant errors, irregularities, noncompliance, and other exposures when developing the engagement objectives.’
About the Author
MOHAMMAD WAHID ABDULLAH KHAN
S/O MOHAMMAD SAADULLAH KHAN
Mr. Mohammad Wahid Abdullah Khan is the Project director of “Max Textiles Ltd”.Mr. Wahid has been in accounting field since 1999. Prior to that he had completed over ten (10) years in various fields of Business like - Accounts, Finance, Internal & External Audit, project budgeting and project costing related positions in some of the largest group companies & the join venture companies in Bangladesh.
He consults about small- medium business owners and services professionals, business consulting service and project process. He is most experience in Financial Risk Assessment, Financial analysis, Financial Advising and Project Cost Analysis. He has published more than 200 articles & case study in different international journals. Such as Business, finance, personal finance, international finance, auditing, Risk assessment topic and performance & industrial related,
Mr. khan’s most popular articles is “WAK” Model - The way of best solution for an organization internal audit process,( 1st,2nd,& 3rd part) “WAK” Model”- for successful financial resource , “Wahid khan”- cost analysis, Wahid theory – the key of dynamic series for successful financial consulting, Wahid techniques – the Significance and dependability manner for Performance audit(1st,2nd,& 3rd part) Wahid’s Opinion - non-conformity among the performance audit and financial audit, Wahid’s view- The cogent task and the confront of financial/economic analysis in the modern business decision making , Wahid’s outlook - The Business Financial Analysis Should Be Included several required Documents with the analysis report or plan, WAHID’S JUDGMENT- difference strategic plan as opposed to an operational plan ,WAHID’S METHOD– the charismatic and fruitful guideline for financial investment decision making ,WAHID’S MEASURE - the influential and evaluated of similarity between profit & non- profit business planning & Wahid’s philosophy- The examined & careful consideration of strategic planning against business planning, PPBS MODEL,
He has consulted with more than 30 service & product companies, in recent years Mr. khan has been spending most of his professional time for financial consulting , Mr. Wahid is the owner of “WAM Associates” and “WAK business solutions”
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